Leading economist fears euro woe

Joseph Stiglitz, one of the world’s most revered economists, has spoken about his worries for the future of the euro.

Stiglitz, who advised President Bill Clinton, was chief economist at the World Bank and is also a winner of the Nobel Prize, has issued new warnings in an updated edition of his book Freefall.

In the book, Stiglitz claims that the euro’s future is “looking bleak” in the face of wide spread European austerity and that a reform will be necessary.

Stiglitz, who currently teaches at the Colombia Business School, said: “The worry is that there is a wave of austerity building throughout Europe and even hitting America's shores. As so many countries cut back on spending prematurely, global aggregate demand will be lowered and growth will slow – even perhaps leading to a double-dip recession.”

Stiglitz also issued further warning to Spain, predicted by many to be the next Greece in terms of economic catastrophe: “Spain must now cut its spending, which will almost surely increase its unemployment rate still further. As its economy slows, the improvement in its fiscal position may be minimal. Spain may be entering the kind of death spiral that afflicted Argentina just a decade ago.”